Income and Investments Gambling Winnings Tax (How Much You Will Pay For Winning?) Read the Article Open Share Drawer Share this:Click to share on Facebook (Opens in new window)Click to share on Twitter (Opens in new window)Click to share on LinkedIn (Opens in new window)Click to share on Pinterest (Opens in new window)Click to print (Opens in new window) Written by Ginita Wall Published Mar 3, 2023 - [Updated Dec 27, 2023] 3 min read Reviewed by Katharina Reekmans, Enrolled Agent Most people don’t think about taxes on their way to a racetrack or casino, but what might seem like nothing more than the chance to win some extra money actually has some tax implications. As is often the case, federal and state governments single out casino winnings for unique taxes of their own. Here is what you need to know about how gambling affects your taxes: How Much You Win Matters It’s important for you to know the thresholds that require income reporting by the payer. Winnings in the following amounts must be reported to the IRS by the payer: $600 or more at a horse track (if that is 300 times your bet) $1,200 or more at a slot machine or bingo game $1,500 or more in keno winnings (minus the amount you bet) $5,000 or more in poker tournament winnings (minus the amount you bet or buy-in price) Get started now All of these require giving the payer your Social Security number, as well as filling out IRS Form W2-G to report the full amount won. In most cases, the casino will take 24 percent off your winnings for IRS gambling taxes before paying you. Not all gambling winnings in the amounts above are subject to IRS Form W2-G. W2-G forms are not required for winnings from table games such as blackjack, craps, baccarat, and roulette, regardless of the amount. Note that this does not mean you are exempt from paying taxes or reporting the winnings on your taxes. Any and all gambling winnings must be reported to the IRS. It only means that you do not have to fill out Form W2-G for these particular table-based games. Reporting Smaller Winnings Even if you do not win as much as the amounts above, you are still legally obligated to claim your winnings at tax-time. You also need to report any awards or prize money you won during the year. Yes, even if you only win $10 sports gambling, you still technically have to report it (even if the casino didn’t). Your gambling income also includes the fair market value of prizes such as cars or trips. Gambling income plus your job income (and any other income) equals your total income. Fortunately, you do not necessarily have to pay taxes on all your winnings. Instead, if you itemize your deductions, you can claim your losses up to the amount of your winnings. But the amount of losses you deduct can’t be more than the amount of gambling income you reported on your tax return. *Note, under the tax reform law, the gambling loss limitation was modified. Prior to the tax reform law, taxpayers’ costs (like transportation and admission fees) could be claimed regardless of winnings. But beginning with the tax year 2018 (the taxes filed in 2019), all expenses in connection with gambling, not just gambling losses, are limited to gambling winnings. What About State Taxes? In addition to federal taxes payable to the IRS, many state governments tax gambling income as well. Each state has its own unique formulas and rules for gambling income, and some levy no gambling taxes at all. Some states charge a flat percentage, while others base the state tax on how much you won. TurboTax Has You Covered Don’t worry about knowing these tax rules. Meet with a TurboTax Full Service expert who can prepare, sign and file your taxes, so you can be 100% confident your taxes are done right. Start TurboTax Live Full Service today, in English or Spanish, and get your taxes done and off your mind. Get started now Previous Post Tax Benefits Changing for Tax Year 2022 Next Post The Tax Deadline is Approaching: TurboTax Shares What You Need… Written by Ginita Wall More from Ginita Wall 489 responses to “Gambling Winnings Tax (How Much You Will Pay For Winning?)” Newer Comments » Why is it that turbo tax says I owe more money after entering my w2gs when my losses are equal (actually above) my winnings. Before I put in my w2s I owed $500.00. After entering my w2g and also my losses I owe alot more. Why does it not even out? Reply Hi Dan, Your losses should have been entered as an itemized deduction, however your eligible losses are limited and may not be more than gambling income reported on your tax return. You also need to check and see if your itemized deductions are more than the standard deductions. If not, you will get the standard deduction, which will not include the gambling losses. Also keep in mind that tax deductions from taxable income do not reduce your tax liability dollar for dollar. TurboTax is in line with all IRS tax laws. Please see IRS Topic 419 for more information regarding gambling losses http://www.irs.gov/taxtopics/tc419.html If you still need more help, our tax experts are available via chat and phone. Thank you, Lisa Greene-Lewis https://blog.turbotax.intuit.com Reply Hi ! I have won a jackpot on a slot machine. The amount is $1337.00. So the tax on that jackpot would be 25% of this amount? Thanks! Reply Hi Debbie, Casinos will typically take 25% out of the winnings prior to paying you. The $1,337 will be added to your other income and will be taxed at your tax rate based on your total income. Thank you, Lisa Greene-Lewis https://blog.turbotax.intuit.com Reply Ive never had a casino take a dime before paying me my jackpot. Even though I have lost much more than I win, I am paying Federal taxes on my winnings. The state of Ca. does not consider I won when I lost more than I won, but the Federal charges taxes even though I lost more than I won. Is this because the Federal taxes me on my total gross income before deductions?? Thank you. Jamie Reply Hi Mr Rooster, If you are deducting your losses up to your winnings as itemized deductions, you have to remember that itemized deductions are not dollar-for-dollar deductions. They reduce your taxable income, but not your tax liability dollar-for-dollar. Thank you, Lisa Greene-Lewis Reply One glaring error in your article – “you will owe the same percentage to the IRS on a $100,000 jackpot as a $10,000 one.” Since gambling winnings are considered the same as ordinary income, for the great majority of people the larger jackpot will put them in a higher bracket. Reply Hi Gary, You are correct when you say gambling winnings are considered in the rest of your ordinary income and it may put people in a higher tax bracket, however the article refers to IRS rules that state “income tax is withheld at a flat 25% rate from certain gambling winnings” per IRS publication 505 http://www.irs.gov/publications/p505/ch01.html#en_US_2012_publink10007297 Thank you, Lisa Greene-Lewis https://blog.turbotax.intuit.com Reply Lisa, the difference between withholding and tax owed is important. You either pay or get refunded that difference, after filing your tax return. There’s a small penalty for “substantial under-reporting” if you owe more than $1,000 at tax time, so you would have to make an “estimated tax” payment if the gambling winnings will make you owe more than that in tax. The 25% withholding rate is unlikely to be equal to the amount actually owed: depending on the size of the win and the taxpayer’s other income, the gambling winnings are likely to be in a higher income tax bracket. If someone 82 years old won 2600.00 at a casino slot machine, do they have to pay taxes on that money Reply Hi Becky, It depends on any other income and their deductions, but they should still file taxes on their winnings as gambling winnings are fully taxable and are required to be reported on their tax return. They can also deduct gambling losses if they itemize deductions, but the losses deducted cannot exceed gambling income. Thank you, Lisa Greene-Lewis Reply Probably not. Depends on how the $2600 affects the “Combined Income.” In general, if the combined income for a single taxpayer is more than $25,000, then he/she may have income tax due. See: http://www.ssa.gov/planners/taxes.htm Your adjusted gross income + Nontaxable interest + ½ of your Social Security benefits = Your “combined income” Reply Becky T., I jumped ahead on my answer above. Combined Income has to do with whether some of an 82-year-old’s Social Security would become taxable because of the $2600 slot machine win. For 2013, if the 82-year old only receives Social Security, and the $2600 slot win, and has no other income, then he/she will not pay any tax on that $2600 win, and will not be required to file a tax return. If the casino withheld tax on that $2600, then the 82-year old should file a tax return in order to get a refund of that amount withheld. Also, I strongly recommend that this person file a tax return for reasons I have stated in other posts on this webpage. YES, you can be 300 years old and live under a bridge, irs care IF YOU WIN, YOU PAY TAXES Reply so if I won and paid my taxes can I declare my losses? how much do I need to loose to recoup the taxes I paid out? I won 2000 in Ohio and they took 6% state tax and 25% federal Reply I recently won 2600$ on a horse betting site, my wager was only 1$. How much will I be taxed? Reply Hi Daniel, You have to input your winnings as other income and your wager as an itemized deduction. TurboTax will figure out how much you will be taxed based on other income, deductions, and your tax bracket. Thank you, Lisa Greene-Lewis https://blog.turbotax.intuit.com Reply They are not required to give out the forms for table games because it is virtually impossible to determine (and prove) how much you actually won. You could walk up to the cashier with $25000 in chips…but how can they know that you didn’t shell out $30,000 to get those chips and lose $5000? And even if you did win, they still can’t make you pay taxes on the full $25,000 since you they know you spent SOMETHING to start off. It would make gambling a logistical nightmare if players required receipts every time they get down to their last chip and grudgingly plunk down another $500 to reload their stack at the blackjack table. Reply Hi, Yes, per the post they are not required to give you a W2-G for certain table games, however you are required to report all gambling winnings. If you itemize your deductions, you can deduct your losses on schedule A. Please see IRS http://www.irs.gov/newsroom/article/0,,id=108277,00.html Thank you, Lisa Lewis https://blog.turbotax.intuit.com Reply my auntie won $800k at an Indian casino recently in california. she got a check for 600K in the end , does she get taxed on the 600K or 800k? she did receive on site $40k initially then the 600k, she assumed that the taxes were deducted when she got the 600k since the check wasn’t for 800k but found out she still has to pay taxes. she is confused on what amount she will be taxed on and how much will she how to put aside for taxes? please advise. thanks! Reply I need to know cab I deduct cost of dentures?? I would like to finish taxes having a problem because i started several months ago trying to get back to them a getting them done!!! Reply Hi Don, Yes you can, however you to be eligible to itemize your deductions(itemized deductions have to exceed standard deductions) and your medical expenses have to be more than 7.5% of your adjusted gross income. TurboTax will guide you through the calculations and will choose the deductions (standard or itemized) you are eligble for. Happy filing! Thank you, Lisa Greene-Lewis Reply Newer Comments » Leave a ReplyCancel reply Browse Related Articles Tax Forms Form 2210 Instructions: How to Calculate and Pay Estimated Taxes to Avoid Penalties Tax Forms What is Form 720? 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Why is it that turbo tax says I owe more money after entering my w2gs when my losses are equal (actually above) my winnings. Before I put in my w2s I owed $500.00. After entering my w2g and also my losses I owe alot more. Why does it not even out? Reply
Hi Dan, Your losses should have been entered as an itemized deduction, however your eligible losses are limited and may not be more than gambling income reported on your tax return. You also need to check and see if your itemized deductions are more than the standard deductions. If not, you will get the standard deduction, which will not include the gambling losses. Also keep in mind that tax deductions from taxable income do not reduce your tax liability dollar for dollar. TurboTax is in line with all IRS tax laws. Please see IRS Topic 419 for more information regarding gambling losses http://www.irs.gov/taxtopics/tc419.html If you still need more help, our tax experts are available via chat and phone. Thank you, Lisa Greene-Lewis https://blog.turbotax.intuit.com Reply
Hi ! I have won a jackpot on a slot machine. The amount is $1337.00. So the tax on that jackpot would be 25% of this amount? Thanks! Reply
Hi Debbie, Casinos will typically take 25% out of the winnings prior to paying you. The $1,337 will be added to your other income and will be taxed at your tax rate based on your total income. Thank you, Lisa Greene-Lewis https://blog.turbotax.intuit.com Reply
Even though I have lost much more than I win, I am paying Federal taxes on my winnings. The state of Ca. does not consider I won when I lost more than I won, but the Federal charges taxes even though I lost more than I won. Is this because the Federal taxes me on my total gross income before deductions?? Thank you. Jamie Reply
Hi Mr Rooster, If you are deducting your losses up to your winnings as itemized deductions, you have to remember that itemized deductions are not dollar-for-dollar deductions. They reduce your taxable income, but not your tax liability dollar-for-dollar. Thank you, Lisa Greene-Lewis Reply
One glaring error in your article – “you will owe the same percentage to the IRS on a $100,000 jackpot as a $10,000 one.” Since gambling winnings are considered the same as ordinary income, for the great majority of people the larger jackpot will put them in a higher bracket. Reply
Hi Gary, You are correct when you say gambling winnings are considered in the rest of your ordinary income and it may put people in a higher tax bracket, however the article refers to IRS rules that state “income tax is withheld at a flat 25% rate from certain gambling winnings” per IRS publication 505 http://www.irs.gov/publications/p505/ch01.html#en_US_2012_publink10007297 Thank you, Lisa Greene-Lewis https://blog.turbotax.intuit.com Reply
Lisa, the difference between withholding and tax owed is important. You either pay or get refunded that difference, after filing your tax return. There’s a small penalty for “substantial under-reporting” if you owe more than $1,000 at tax time, so you would have to make an “estimated tax” payment if the gambling winnings will make you owe more than that in tax. The 25% withholding rate is unlikely to be equal to the amount actually owed: depending on the size of the win and the taxpayer’s other income, the gambling winnings are likely to be in a higher income tax bracket.
If someone 82 years old won 2600.00 at a casino slot machine, do they have to pay taxes on that money Reply
Hi Becky, It depends on any other income and their deductions, but they should still file taxes on their winnings as gambling winnings are fully taxable and are required to be reported on their tax return. They can also deduct gambling losses if they itemize deductions, but the losses deducted cannot exceed gambling income. Thank you, Lisa Greene-Lewis Reply
Probably not. Depends on how the $2600 affects the “Combined Income.” In general, if the combined income for a single taxpayer is more than $25,000, then he/she may have income tax due. See: http://www.ssa.gov/planners/taxes.htm Your adjusted gross income + Nontaxable interest + ½ of your Social Security benefits = Your “combined income” Reply
Becky T., I jumped ahead on my answer above. Combined Income has to do with whether some of an 82-year-old’s Social Security would become taxable because of the $2600 slot machine win. For 2013, if the 82-year old only receives Social Security, and the $2600 slot win, and has no other income, then he/she will not pay any tax on that $2600 win, and will not be required to file a tax return. If the casino withheld tax on that $2600, then the 82-year old should file a tax return in order to get a refund of that amount withheld. Also, I strongly recommend that this person file a tax return for reasons I have stated in other posts on this webpage.
so if I won and paid my taxes can I declare my losses? how much do I need to loose to recoup the taxes I paid out? I won 2000 in Ohio and they took 6% state tax and 25% federal Reply
Hi Daniel, You have to input your winnings as other income and your wager as an itemized deduction. TurboTax will figure out how much you will be taxed based on other income, deductions, and your tax bracket. Thank you, Lisa Greene-Lewis https://blog.turbotax.intuit.com Reply
They are not required to give out the forms for table games because it is virtually impossible to determine (and prove) how much you actually won. You could walk up to the cashier with $25000 in chips…but how can they know that you didn’t shell out $30,000 to get those chips and lose $5000? And even if you did win, they still can’t make you pay taxes on the full $25,000 since you they know you spent SOMETHING to start off. It would make gambling a logistical nightmare if players required receipts every time they get down to their last chip and grudgingly plunk down another $500 to reload their stack at the blackjack table. Reply
Hi, Yes, per the post they are not required to give you a W2-G for certain table games, however you are required to report all gambling winnings. If you itemize your deductions, you can deduct your losses on schedule A. Please see IRS http://www.irs.gov/newsroom/article/0,,id=108277,00.html Thank you, Lisa Lewis https://blog.turbotax.intuit.com Reply
my auntie won $800k at an Indian casino recently in california. she got a check for 600K in the end , does she get taxed on the 600K or 800k? she did receive on site $40k initially then the 600k, she assumed that the taxes were deducted when she got the 600k since the check wasn’t for 800k but found out she still has to pay taxes. she is confused on what amount she will be taxed on and how much will she how to put aside for taxes? please advise. thanks! Reply
I need to know cab I deduct cost of dentures?? I would like to finish taxes having a problem because i started several months ago trying to get back to them a getting them done!!! Reply
Hi Don, Yes you can, however you to be eligible to itemize your deductions(itemized deductions have to exceed standard deductions) and your medical expenses have to be more than 7.5% of your adjusted gross income. TurboTax will guide you through the calculations and will choose the deductions (standard or itemized) you are eligble for. Happy filing! Thank you, Lisa Greene-Lewis Reply